Report: Amazon phone will be AT&T exclusive

Jun. 17, 2014
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Amazon logo / Getty/AFP

by Edward C. Baig, USA TODAY

by Edward C. Baig, USA TODAY

Amazon has yet to reveal its long-rumored smartphone, but the device may already have an exclusive carrier.

According to The Wall Street Journal, which cites "people familiar with the plans," AT&T will exclusively carry Amazon's smartphone, which CEO Jeff Bezos is expected to unveil in Seattle Wednesday. USA TODAY was unable to independently verify the report.

Amazon teased the arrival of the phone earlier this month in a video inviting the public to request a seat at the launch event.

The smartphone will reportedly feature a glasses-free 3-D interface made possible through four built-in cameras.

Such an interface would help Amazon differentiate its handset in a smartphone market that's already hyper-competitive and currently dominated by hardware giants Apple and Samsung. Research firm IDC says that during the first quarter of this year, the two companies commanded a combined 45% market share among global smartphone shipments by manufacturer.

Amazon recently launched Prime Music, a streaming music service that will be included in subscriptions to Amazon Prime, currently $99 a year. Amazon Prime membership also includes a streaming video service, as well as the feature that originally put it on the map, free two-day shipping on many of the products sold by the online retailer.

Prime very likely will play a role on the new phone. Amazon and AT&T could well be teaming up on a specialized wireless plan dubbed Prime Data, according to a report by the BGR tech blog. Under such a plan, Amazon could provide smartphone subscribers with access to Prime video and music content at no extra cost, and without otherwise cutting into the person's wireless data plan.

The other big wild card here is what the hardware itself will cost. Amazon has previously subsidized Kindle hardware through advertising.

However it plays out, an Amazon phone will likely just be the latest front end to get you to spend money at Amazon. Bezos has often said that Amazon doesn't make a lot of money selling hardware such as its Kindle Fire tablets. Instead, the payoff comes when you're lured into Amazon's vast content ecosystem for books, movies, TV shows, music and games.

"An Amazon smartphone would be less about profiting from device sales per se and more a way to pocket a larger share of multiple revenue streams, such as mobile retail sales, mobile content and advertising," says Cathy Boyle, senior mobile analyst at eMarketer.

As with Amazon's tablets, the phone is likely to overlay Amazon's own interface on top of Android, and you would shop not in the Google Play store, but rather in Amazon's own storefront.

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